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ADNOC Drilling jumps over 30% in debut for Abu Dhabi's largest IPO

Stock MarketsOct 03, 2021 03:15AM ET
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© Reuters. FILE PHOTO: Electronic boards displaying stock information are seen as an investor walks past at the ADX Abu Dhabi Securities Exchange stock market May 16, 2012. REUTERS/Ben Job/File Photo

DUBAI (Reuters) -ADNOC Drilling shares jumped more than 30% as the unit of Abu Dhabi oil giant ADNOC started trading on Sunday after its $1.1 billion initial public offering (IPO), the largest ever on the Abu Dhabi stock market.

ADNOC Drilling, whose share offering attracted more than $34 billion in demand, is expected to be among the 10 largest companies on the Abu Dhabi Securities Exchange, based on a market capitalisation at listing of about $10 billion.

Its shares surged over 30% to 3.05 dirhams in early trading.

"This important milestone will bolster the expansion and diversification of Abu Dhabi’s equity capital markets and further the development of the UAE’s economy and private sector", ADNOC said in a statement.

The IPO is the latest move by Gulf oil giants ADNOC and Saudi Aramco (SE:2222) to raise cash from outside investors as they try to diversify sources of income in their oil-dependent economies.

Saudi Aramco listed in late 2019, raising $29.4 billion in the world's biggest IPO.

ADNOC will continue to own an 84% majority stake in the unit, while Baker Hughes will retain its 5% shareholding. Helmerich & Payne (NYSE:HP) will hold 1% through its IPO cornerstone investment.

ADNOC increased the size of the IPO to 11% of share capital because of oversubscription. It had previously targeted selling a minimum stake of 7.5%.

The sale is the second public flotation of a company owned by the Abu Dhabi oil major after the 2017 listing of ADNOC Distribution, the largest operator of petrol stations and convenience stores in the UAE.

ADNOC Drilling jumps over 30% in debut for Abu Dhabi's largest IPO
 

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Comments (2)
Fabio Ravanelli
Fabio Ravanelli Oct 03, 2021 9:45PM ET
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all gulf states are desperate for money. First they borrowed money from every possible source. Now they will sell every subsidiary they can. But remember Aramco was once a private company. Nationalized by form in the 80's. In a dictatorship the only thing keeping these newly listed companies of being re-nationalized is the good will of a benevolent dictator.
Mo Kham
Mo Kham Oct 03, 2021 3:04AM ET
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lll
 
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